Tom Ricketts, chairman of the Chicago Cubs, took a swing at explaining to a room full of traders and brokers how what were once “lovable losers” became the 2016 World Series champions.
“I could give a one-hour talk on the retail bond markets,” said Mr. Ricketts, founder and former CEO of investment bank Incapital LLC, Chicago, speaking Jan. 12 at the Security Traders Association-Chicago's Mid-Winter Conference. “But I think you'd rather hear about the Cubs.” The Ricketts family bought the team in 2009.
Using bell curves and bar charts, Mr. Ricketts explained how the team was rebuilt for what he called “sustained success.”
He showed that, although the team led Major League Baseball in wins and was among the league leaders in payroll last season, the correlation between both and a World Series win was generally very low.
He said a better model for sustained growth was paying for players when their value is high. He showed, in another chart, that the value of players — measured by wins above their replacement — can turn negative at age 32 when their value becomes offset by their salaries.
“When we took over, our players were old, overpaid, bad, with no prospects coming up,” Mr. Ricketts said. “Most of our players were in that negative value area. But in 2017, most of our players are in positive value. They're young, they're successful, and they'll be in that area for several years.”